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An Updated Guide To The Birds At The Federal Reserve

Tyler Durden's picture


Lately there has been some confusion as to who of the Fed's 12 presidents is a hawk and a dove. Luckily, SocGen provides a handy tearsheet to keep track of who, as per recent public appearances, is hawkish, who is bearish, and who is largely irrelevant (everyone) considering that nobody has dissented at an FOMC meeting since Hoenig left the voting spot. Ultimately, the deciding vote is always and only in the Chairsatan's hands.

Below is a summary of recent Fedspeak:

Bernanke – QE2 will be completed, but very little chance of QE3 as the trade-offs are unfavorable. Inflation expectations are still in comfort zone, but continue to watch very closely.

Pianalto – Labor market remains a long way from healthy. Looking at just above 3% GDP growth over next few years. Will take about 5 to 6 years for unemployment rate to reach NAIRU (5.5 to 6%).

Kocherlakota – Fed should raise the Fed funds rate by 50bps in 2011. Rate hikes hinge on his forecast for core inflation averaging 1.5% for rest of year. Rate hikes should be first move in exit strategy. Extended language means 2 to 4 meetings.

Lockhart – Extended period change hinges on Unemployment. Job progress slow and inflation transitory. QE3 probably unnecessary. Inflation will move to about 2% in two years.

Lacker – Inflation expectations at the upper end of the Fed’s comfort zone. Recent surge in commodity prices likely temporary. After QE2 focus shifts to timing and speed of stimulus withdrawal.

Bullard – Fed may put policy on hold to ensure economic recovery is gaining ground. Does not give judgment whether he agrees with this. US can weather recent oil price shock.

Dudley – Time to act is now. Current levels of inflation and unemployment and timeframe to return to mandate unacceptable. Showed support for price level targeting.

Evans – Believes that Fed needs to buy at a large scale several times. This would support a price level target to make up for the shortfall in Inflation. Strong support for price level targeting.

And as a bonus, here is SocGen's current set of assumptions for the chronology of Fed exit steps:

1. End of QE2 The April FOMC statement confirmed that QE2 will end on schedule, after reaching the $600bn target. This will mark the official end of the Fed’s easing cycle. When? June 2011

2. Halting MBS reinvestments Bernanke noted in its April FOMC press conference that halting MBS reinvestments will most likely occur early in the exit process. Fed will probably wait a few months following the end of QE2 to assess the impact before taking this next step. When? September 2011

3. Liquidity draining operations We believe this has to be done ahead of rate hikes, or else the effective fed funds rate will trade away from the target. The Fed could use a combination of reverse repos, term deposits and possibly restore the Supplemental Financing Program  (subject to Congress increasing debt ceiling). When? November 2011

4. End of “extended” language The Fed has previously suggested that the extended language means about 6-9 months. Given the timing of our rate call, the phrase should be dropped around the turn of the year. When? December 2011

5. Rate hikes Our call is for mid-2012, with a bias toward the third quarter. When? Q3’2012

6. Asset sales We believe that outright asset sales will begin around the time of the first rate hike. Fed has indicated a goal of returning the size and composition of its securities portfolio to pre-crisis trend over 5 years. We believe they will start by selling about $10bn per month. When? Q3’2012


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Mon, 06/06/2011 - 10:05 | 1343116 GetZeeGold
GetZeeGold's picture




0 hits, 0 runs, 1000 errors.


Good to see everyone in agreement.

This should be a snap.


Mon, 06/06/2011 - 10:03 | 1343127 ugly_avatar_Muir
ugly_avatar_Muir's picture


and specially silver

Mon, 06/06/2011 - 10:03 | 1343130 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Bread and Circuses.  Next up on E-Bay - Nero's Fiddle.

Mon, 06/06/2011 - 10:30 | 1343174 serotonindumptruck
serotonindumptruck's picture

"Next up on E-Bay - Nero's Fiddle."

Or Damocles Sword.

Mon, 06/06/2011 - 10:35 | 1343195 Ancona
Ancona's picture

Followed by Diogenes lantern

Mon, 06/06/2011 - 11:16 | 1343322 Whatta
Whatta's picture

...and Hillary's testacles.

Mon, 06/06/2011 - 10:05 | 1343134 SMG
SMG's picture

The truth is, the only birds at the Fed are vultures, here to pick our carcass clean.

Mon, 06/06/2011 - 10:10 | 1343136 FLETCH
FLETCH's picture


This is for our entertainment.

Deciding factor will be the Oilgarchs telling the Beard what the decision will be.

Oligarchs need QE3 since the asset deflation will be unacceptable.

Explanations from the Fed goons will be supplied post haste.


Mon, 06/06/2011 - 11:26 | 1343353 trav7777
trav7777's picture

Rate hikes are predicated upon an improvement in the real economy...ain't gonna happen by 2012 because this isn't a monetary problem

Mon, 06/06/2011 - 10:11 | 1343139 Mercury
Mercury's picture

I see no column for 'turkey'

Mon, 06/06/2011 - 10:11 | 1343141 ziggy59
ziggy59's picture

you left off Dodos...

Mon, 06/06/2011 - 10:13 | 1343143 oogs66
oogs66's picture

does anyone have the history of fed voting?  what have total number of dissenting votes been ever?  what were most dissenters on a single vote?  my guess is the chaiman of the fed has support that would make chairman mao blush

Mon, 06/06/2011 - 10:14 | 1343145 BlackholeDivestment
BlackholeDivestment's picture

The tree is barren of fruit ...because it is cursed with foul fowel.

Mon, 06/06/2011 - 10:14 | 1343147 baby_BLYTHE
baby_BLYTHE's picture

If anyone missed it, Luke Rudkowski from WeAreChange recently snunk into a wealthy elitist cocktail party to confront the chairsatan.

Mon, 06/06/2011 - 10:19 | 1343154 ugly_avatar_Muir
ugly_avatar_Muir's picture

Thank you baby.

Do well on your tests

Mon, 06/06/2011 - 10:16 | 1343149 DeweyLeon
DeweyLeon's picture

As meaningful as the R or D after a politician's name.

Mon, 06/06/2011 - 10:16 | 1343156 jesusonline
jesusonline's picture

Feed them with DDT, all of them.

Mon, 06/06/2011 - 10:41 | 1343223 BlackholeDivestment
BlackholeDivestment's picture

 Where do you think DDT comes from? The PIIGS trough over runneth from Chairsatan's BTFD Cup of Poison, does it not?

Mon, 06/06/2011 - 10:57 | 1343278 jesusonline
jesusonline's picture

Nice stuff, thank you kindly :)

Mon, 06/06/2011 - 10:26 | 1343167 Caviar Emptor
Caviar Emptor's picture

These days whenever somebody proposes a rate hike, Fed governors flip him the bird! The dove, that is 

Mon, 06/06/2011 - 10:38 | 1343178 Cognitive Dissonance
Cognitive Dissonance's picture

Good lord. We can spend all day trying to decide who is a hawk and who is a dove. At the end of the day they are all Penguins who will protect their eggs at all costs. The Fed presidents are one egg animals.

Mon, 06/06/2011 - 11:03 | 1343291 Audacity17
Audacity17's picture

If something is a 'science' does it really take a panel of people voting??

Mon, 06/06/2011 - 11:23 | 1343341 GeneMarchbanks
GeneMarchbanks's picture

Good question. Plosser and Hoenig will be the only opposition to the next round of QE which should be in about two-three months tops.

Also, charts that cover how "dovish" you are work only if you have a sad population polluted by scientism. All is the affair of bureaucrats even real "science".

Mon, 06/06/2011 - 11:03 | 1343292 TruthBeforeAll
TruthBeforeAll's picture

Sooooo.... how can an economic recovery occur if there is nothing on the shelves that anybody really wants to buy? I guess we could be forced to buy things, but given the propensity of free men to push back against forced participation in any activity (whether beneficial or not) I can't see this happening. So what is the next great "thing" to move the economy forward? Battery powered cars? I think not.

Mon, 06/06/2011 - 11:54 | 1343423 White.Star.Line
White.Star.Line's picture

"Birds" at the FED have as much latitude in their decisions as our elected so called leaders.
They are both owned, and follow orders as such.

Mon, 06/06/2011 - 12:19 | 1343513 glenlloyd
glenlloyd's picture

All the responses are predicated on a 'supposed' economic recovery. Since there isn't any real economic recovery all the yack about normalization of balance sheet / rates and withdrawal of stimulus is just talk, nothing more, it will never happen.

Since the economy depends on a sustained stimulus to survive, the stimulus will continue. I'm not saying that they won't take away the punch bowl temporarily in order to garner support for more stimulus, I'm almost certain they will, they need to raise the panic level in order to justify more of the same.

Mon, 06/06/2011 - 12:24 | 1343530 GottaBKiddn
GottaBKiddn's picture


All rhetorical distractions aside, all of the Fed initiates have sworn allegiance, and are fully aware that the genitals of all their family members are firmly in the grasp of their Master, ChairSatan.



Mon, 06/06/2011 - 14:09 | 1343849 Atlantis Consigliore
Atlantis Consigliore's picture

Berflunky and the band of flunkies:


that showman on boob n boobs show on

nothing but crud network;


he got it right:    They Know Nothing.!


QE 3, QE 7-  keep on printing and in private

stinking, maybe they can go to govt slacks

get on their knees and beg ...for a job,


Berflunky;  ill write a book use my new

name:  Scarecrow,  if only I had a brain.


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